New legislation rescues, improves 2 tax breaks

In rapid-fire succession, the Senate and House passed significant new legislation in early November, extending unemployment benefits and adding certain tax-based incentives. On Nov. 6, 2009, the president officially signed the fast-track new law—the “Worker, Homeownership, and Business Assistance Act of 2009.”

Alert: Among the key tax changes, the new law expands and extends the tax credit for “first-time homebuyers” and the longer carryback period for net operating losses (NOLs). Both of these tax breaks were scheduled to go off the books.

Here’s a quick review of the two most important new tax provisions.

1. First-time homebuyer credit

Initially, a first-time homebuyer could claim a refundable tax credit equal to the lesser of $7,500 or 10% of the price of a home purchased after April 8, 2008, and before July 1, 2009. A “first-time homebuyer” was defined as someone who has not owned a principal residence for the th...(register to read more)

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